FAQ – Texas Demand Response – Emergency Response Service

Get Paid to Reduce Energy with Demand Response in ERCOT

Demand Response is part of a comprehensive suite of energy management applications and services that can help you earn money, save on energy costs, and reduce risks to your operations. Bridgevue helps business organizations in Texas maximize the benefits of demand response (DR) through its comprehensive DR application. Participating in ERCOT’s Emergency Response Service has never been easier.

What Is Demand Response?

Bridgevue provides an opportunity for commercial, institutional, and industrial organizations in Texas to earn money and drive energy savings through ERCOT’s demand response program. Your participation helps support the reliability of the electric grid and keep the lights on for everyone in the community.

Program participants receive recurring payments in return for agreeing to reduce electricity consumption in response to abnormally high electricity demand or grid imbalances. Bridgevue Energy manages your participation from start to finish to help ensure that you receive the highest possible financial rewards.

What Is ERCOT’s Emergency Response Service (ERS) Program?

ERCOT’s Emergency Response Services program is a grid reliability wholesale demand response program intended to prevent rolling power outages during times of grid emergencies. The Emergency Response Services demand response program is aimed specifically at load resources (end-use consumers of electricity) that have the ability to temporarily reduce their power consumption in response to grid emergencies. For example, during the February 2011 ice storm in Texas, which knocked out over 7,000 MW of power generation, ERCOT’s Emergency Response Service demand response program deployed over 400 MW of load reduction that helped relieve stress on the grid averting a far greater disaster.

What DR products are available for the ERCOT ERS DR Program?

There are two product variants of Emergency Response Service as related to advanced notification response time. The first product variant (ERS-10) requires a 10-minute notification response time for the load resource to reduce its load obligation. The notification is initiated by ERCOT, sent to the designated qualified scheduling entity (QSE) managing the load resources in the program, and then forwarded by the QSE to the load resource obligated to reduce its load.

The second product variant (ERS-30) requires a 30-minute notification response time for the load resource to reduce its load obligation. The notification is initiated by ERCOT, sent to the designated qualified scheduling entity (QSE) managing the load resources in the program, and then forwarded by the QSE to the load resource obligated to reduce its load.

When can I participate in the ERCOT ERS DR Program?

Both products are available year-round in three 4-month long performance periods, which include February through May, June through September, and October through January. For each 4-month performance period load resources can bid their curtailable load into four time periods as follows:

• Business Hours 1 (BH1): Monday through Friday from 8:00am to 1:00pm.
• Business Hours 2 (BH2): Monday through Friday from 1:00pm to 4:00pm.
• Business Hours 3 (BH3): Monday through Friday from 4:00pm to 8:00pm.
• Non-Business Hours (NBH): All other hours Monday through Sunday.

Load resources are required to be tested by ERCOT for an actual load curtailment once every 365 days, unless an actual emergency grid event occurs during the same compliance period. Historically since the Emergency Response Service was introduced in 2008, there have only been a few actual emergency deployments, which include the following:

• February 2011 – Ice Storm
• August 2011 – Heat Wave
• January 2014 – Polar Vortex

How do I qualify for the ERCOT ERS DR Program?

In order for load resources to qualify for participation in ERCOT’s Emergency Response Service program, load resources must have either an interval data recorder (IDR) meter, or smart meter that can measure demand and consumption every 15-minutes. In addition, load resources must be capable of curtailing a minimum of 100 kW of load within the response time (10 minute for ERS-10 or 30 minutes for ERS-30).

How are QSE’s involved in the ERS DR Program?

Qualified Scheduling Entities aggregate load resources together into portfolio’s and bid load portfolio’s into ERCOT’s auction every 4-months. The bids must include curtailable load (in MW’s), selected time period (e.g. BH1, BH2, etc.) and price per MW per hour. ERCOT uses a clearing price mechanism to select winning bids for both ERS-10 and ERS-30 load resources. Those load resources that submitted bid prices at or below the clearing price receive awards and clearance to participate in the 4-month performance period.

How do I get compensated for my performance in the ERCOT’s ERS DR Program?

After the 4-month performance period is completed, ERCOT conducts settlement of each Qualified Scheduling Entities availability and performance factor as an overall portfolio, and the availability and performance of each individual load resource in the portfolio to determine compensation of the Qualified Scheduling Entity, and the individual load resources within a particular portfolio. ERCOT provides monetary compensation to Qualified Scheduling Entities within 70 days after the end of the performance period.

How much money can I make participating in the ERCOT ERS DR Program?
The annualized compensation of load resources in the Emergency Response Services program has increased over the past 2 years. Depending upon the number of hours that you enroll and the value of your accepted bid price, load resources can earn $40,000 to $65,000 per year based on 1 MW of load curtailment.

What Is the Commercial Load Management (CLM) Demand Response Program?

The regulated utilities in ERCOT such as Oncor Electric Delivery Company, AEP, and CenterPoint Energy are required to offer a variety of Standard Offer Programs (SOP) for energy efficiency per regulatory requirements set by the Texas Public Utility Commission (PUC-T). One of the required SOP programs required of all Investor Owned Utilities (IOU’s) is a demand response program called Commercial Load Management (CLM).

When is the CLM Demand Response Program Offered?

The program is currently offered during the summer months (June, July, August, and September) with the objective of reducing peak demand during emergency conditions within a particular utility region. Below is a summary of the CLM program highlights:

• Performance Month Period: June 1st through September 30th
• Performance Day Period: Monday through Friday (non-holiday days)
• Performance Hours Period: 1:00pm CST to 7:00pm CST
• Maximum Hours of Deployments: 17 hours total cumulative
• Notification Time: 30 minute to 60 minute depending upon the IOU
• Financial Incentive Payment: Ranges from $25 to $40 per kW depending upon the IOU. Includes two payments. One payment for baseline test, and one payment for performance period.
• Testing Requirement: Baseline curtailment test for 1 hour to 2 hour depending upon the IOU
• Meter Requirement: Interval Data Recorder (IDR) meter with 15-minute interval granularity
• Payment Calculation: Payment calculations vary by IOU, but in general are based on a function of curtailed load in kW multiplied by financial incentive rate ($/kW) for the end-user’s preliminary baseline performance and for actual curtailment events during the performance period.
• Timing of Payments: Financial incentives are paid to end-users after within 45 to 60 days after the IOU conducts load settlement analysis.

What has been the history of actual emergency curtailment events for the CLM Demand Response Program?

Historically, since the CLM programs have been offered starting back in 2002, every season except for the summer of 2011 and 2012, there have rarely been any actual emergency CLM deployments. Prior to the summer of 2011, CLM events were considered an anomaly in terms of the number and duration of emergency curtailment deployments. It should be noted that historical performance is not a precise indicator of future performance.

What Is the ERCOT Four Coincidental Peaks (4CP)?

All of the regulated ISO’s, municipalities, and cooperatives in ERCOT territory recoup investment in regulated transmission charges through tariffs that are a function of four coincidental peaks (4CP) of the ERCOT system-wide peak demand (as measured in kW’s) for each of the four summer months (June, July, August, and September).

How is the ERCOT 4CP calculated?

To calculate an end-use load’s 4CP kW demand, take the highest ERCOT system peak demand measured during any 15-minute interval and whatever the end-user’s peak demand load is during that same 15-minute interval for each of the four summer months, then take the simple 4-month average of the four load data points, and the resulting calculation is the un-adjusted 4CP kW demand. Some of the utilities adjust the 4CP kW demand of an end-user based on their power factor. If the power factor is less than 95%, then the final adjusted 4CP would be calculated by dividing the un-adjusted 4CP by the power factor.

What is the range in cost of the 4CP tariffs in ERCOT?

The transmission charge for end-users served by Investor Owned Utilities (IOU’s) (e.g. Oncor, CenterPoint, and AEP) is calculated by multiplying the adjusted 4CP kW times the IOU’s tariff rate in $/kW. The tariff rates vary by IOU. The annualized 4CP related transmission charges range from $25,000 to $40,000 per year for 1,000 kW of demand.

What Is the 4CP Demand Response Program?

End-use loads that have the ability to reduce their load partially or completely during the 4CP 15-minute interval are able to reduce or completely avoid 4CP related transmission charges the entire following year.

Bridgevue offers eligible business clients (must have IDR meter and ability to voluntarily reduce electric consumption temporarily) a 4CP warning notification system that enables clients to receive from Bridgevue a phone call and/or electronic message via text or email notifying clients of a potential 4CP event and to voluntarily reduce their electric consumption. The notification will stipulate the start and end time of the voluntary load curtailment.

What Is the ERCOT Load Resources (LR) Demand Response Program?

The former ERCOT demand response program called Load Acting As Resources (LaaR) has been renamed Load Resource (LR). The LR demand response program is an ancillary services program that enables load resources to bid into ERCOT’s Responsive Reserve Service (RRS) ancillary services market. LR’s are compensated with the hourly RRS market clearing capacity price (MCPC) under bilateral contractual arrangements with approved Qualified Scheduling Entities. Load resources considering participation in the LR demand response program are required to meet various requirements in order to qualify for participation. To learn more about the requirements and whether or not your business meets these requirements, please contact us.

To contact us – call (972-432-6686)